Directors' report (Contd.)
25. Employee Stock Option Plan (ESOP)
We had introduced various stock option plans for our employees. The details of options granted under the 1998 Stock Option Plan (the 1998 Plan) and the 1999 Stock Option Plan (the 1999 Plan) are as follows :
1998 Plan |
1999 Plan |
|
Total grants authorized by the plan (no.) |
1,17,60,000 ADS |
5,28,00,000 shares |
Pricing formula on date of grant |
Not less than 90% of fair market value |
Fair market value |
Variation in terms |
NA |
NA |
Ratio of ADS to equity shares |
1 ADS = 1 equity share |
NA |
Options granted during the year (no.) |
– |
– |
Weighted average price per option granted ( |
NA |
NA |
Options vested as at March 31, 2011 (no.) |
50,070 |
40,232 |
Options exercised during the year (no.) |
1,88,675 |
1,37,692 |
Total number of shares arising as a result of exercise of options |
1,88,675 |
1,37,692 |
Money raised on exercise of options ( |
13 |
11 |
Options forfeited and lapsed during the year (no.) |
3,519 |
18,052 |
Total number of options in force at the end of the year (no.) |
50,070 |
48,720 |
Grant to senior management |
– |
– |
Employees receiving 5% or more of the total number of options granted during the year |
– |
– |
Employees granted options equal to or exceeding 1% of the issued capital |
– |
– |
Diluted EPS on issue of shares on exercise calculated in accordance with AS 20 |
112.22 |
112.22 |
SEBI has issued the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999. This is effective for all stock option schemes established after June 19, 1999. In accordance with these guidelines, the excess of the market price of the underlying equity shares as of the date of the grant over the exercise price of the option, including up-front payments, if any, is to be recognized and amortized on a straight line basis over the vesting period.
We have the 1998 Stock Option Plan and 1999 Stock Option Plan, where the options are issued to the employees at an exercise price not less than the fair market value.
If the compensation cost on account of stock options granted after June 30, 2003 (as required by the amendment effective June 30, 2003) under 1998 and 1999 Plans was computed using the fair value method, our compensation cost would have been higher by 
1 crore. Our profit would hence be less by 1 crore for fiscal 2010. The impact on EPS for fiscal 2010 would be 0.01. For fiscal 2011 there was no stock compensation cost. During fiscal 2011 and 2010, stock options under the 1998 Plan and 1999 Plan have not been granted. Hence, the weighted average fair values of grant during these years are nil.
All stock options under the 1998 and 1999 Employees Stock Option Plans were granted at the prevalent market price on the date of grant. Accordingly, we have calculated the compensation cost arising on account of stock options granted using the intrinsic value method. Hence, the disclosure in terms of Clause 12.1 (n) of SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, is not applicable.
2011 |
2010 |
|||
No. of options |
Weighted average |
No. of options |
Weighted average |
|
1998 Plan |
||||
Outstanding at the beginning of the year |
2,42,264 |
613 |
9,16,759 |
904 |
Forfeited |
(3,519) |
722 |
(60,424) |
1,550 |
Exercised |
(1,88,675) |
600 |
(6,14,071) |
854 |
Outstanding at the end of the year |
50,070 |
683 |
2,42,264 |
613 |
Vested at the end of the year |
50,070 |
683 |
2,42,264 |
613 |
1999 Plan |
||||
Outstanding at the beginning of the year |
2,04,464 |
869 |
9,25,806 |
1,248 |
Forfeited |
(18,052) |
964 |
(3,40,264) |
1,968 |
Exercised |
(1,37,692) |
823 |
(3,81,078) |
821 |
Outstanding at the end of the year |
48,720 |
962 |
2,04,464 |
869 |
Vested at the end of the year |
40,232 |
717 |
1,84,759 |
735 |
26. Infosys Science Foundation
The Infosys Science Foundation, a not-for-profit trust set up to promote research in pure and applied sciences, presented the Infosys Prize to scientists and researchers in the five categories of research listed below :
- Physical Sciences – Physics, Chemistry and Earth Sciences
- Mathematical Sciences – Mathematics and Statistics
- Engineering and Computer Science – All branches of Engineering
- Life Sciences – Biology, Medicine and Plant Science
- Social Sciences and Economics – History, Sociology, Anthropology, Political Science, Economics and International Relations
Nominations were evaluated by an eminent jury in each area, comprising outstanding international personalities selected by the trustees of the Foundation.
The Infosys Prize 2010 presentation was held in Mumbai on January 6, 2011. Laureates were felicitated by the Prime Minister of India, Dr. Manmohan Singh. The prize in each category comprised a 24 karat gold medallion, a citation and a cash grant of 50 lakh.
For more details on the Infosys Science Foundation, refer to the website www.infosys-science-foundation.com
27. Infosys Foundation
We are committed to contributing to the society and established Infosys Foundation in 1996 as a not-for-profit trust to support our social initiatives. The Foundation supports programs and organizations devoted to the cause of the destitute, the rural poor, the mentally challenged, and the economically disadvantaged sections of the society. The Foundation also helps preserve certain cultural forms and dying arts of India.
A summary of the work done by the Foundation is provided in the Additional Information Report published on our website www.infosys.com. On your behalf, we express our gratitude to the honorary trustees of the Foundation for sparing their valuable time and energy for its activities.
28. Green initiative
During the previous fiscal, we started a sustainability initiative with the aim of being green and minimizing our impact on the environment. Like last year, this year too we are publishing only the statutory disclosures in the print version of the Annual Report along with the Abridged standalone financial statements prepared in compliance with the Section 219 of the Companies Act, 1956. Additional details are available on our website, www.infosys.com.
Acknowledgments
We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.
We thank the governments of various countries where we have our operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Commerce, the Ministry of Finance, the Customs and Excise Departments, the Income Tax Department, the Reserve Bank of India, the state governments, the Software Technology Parks (STPs) – Bangalore, Bhubaneswar, Chandigarh, Chennai, Gurgaon, Hyderabad, Jaipur, Mangalore, Mysore, Pune, and Thiruvananthapuram and other government agencies for their support, and look forward to their continued support in the future.
for and on behalf of the Board of Directors
|
|
S. Gopalakrishnan |
S. D. Shibulal |
Bangalore
April 15, 2011